Leather industry continues to feel global trade uncertainty

Leather industry continues to feel global trade uncertainty

By Arnaud Backbier

The global trade uncertainty continues to impact the leather production because this uncertainty impacts the demand for cars, leather goods and shoes, aside from the existing changing nature of the use of leather as a fabric.

Although we notice some stability during the last months, the demand for leather is still lower than in previous years, while at the same time there is an oversupply as, obviously, the demand for meat is strong enough. The oversupply is partly due to overall consumption patterns of meat, which are stable, but also to unique events such as the African Swine Fever in Asia which have also increased the demand for beef. Some indications say that 15% to 20% of the raw hides are not used for leather and often end up as waste – which is a waste of a by-product. Overall prices are stable at a low point for the time being. Order volumes in the leather industry continue to be under pressure and Smit & Zoon notices this of course. Like everyone in the leather value chain we need to monitor the global trade uncertainty and like every company in the chain, we have to deal with the consequences.

On the other hand, we see that key brands look positively to the future, based on the fact that leather as a material has a high degree of durability, performance and authenticity. By promoting the natural benefits of leather, we continue to support our customers making new or interesting leather articles to promote their sales and of course our sales.

Whereas we can debate and analyse the volatility in global trade, there is so much we can influence and prepare for what will happen. We can and will continue to improve the manufacturing of leather and make sure leather is the preferred fabric to use by brands in each segment as well as by consumers.

This is a key reason why Smit & Zoon continues its drives for innovation and sustainable leather by our ZDHC level 3 certification and keeps working on new products such as based on the LIFE Biopol technology and the new Optitan range we introduce in this newsletter.